06 August 2020
This week we launch our latest insight-led report on digital banking transformation. The report looks at why a marketing mindset is critical to successful digital transformation initiatives and how the COVID-19 pandemic has impacted digital transformation across banks and credit unions.
Retail banks have been stressing the importance of digital transformation since the 1990s, but investment patterns paint a picture of inefficient transformation projects that often fail to succeed. In 2019 it was estimated that US banks had invested $162 billion on their currently live digital transformation initiatives, yet only 25% of customers reported any discernible difference in the digital experiences offered.
COVID-19 has created a powerful inflection point for banks and credit unions. Everything has required rethinking and digital transformation has been put at the top of the agenda. Banking has had to become wholly digital, disregarding whether banks or their customers are ready for a digital switch. And despite great investment and discussion, this shift hasn’t been a seamless transition for most.
The research: survey and results overview
With this in mind, we surveyed 500 senior financial marketers in the US and Europe between April 27th and May 17th, three months into the COVID-19 pandemic. All respondents had live digital transformation initiatives and represented a diverse set of skills, experiences and priorities across the full range of institution sizes.
Our research has found both large and small financial institutions have faced similar challenges in the wake of the COVID-19 pandemic and have been forced to take radical action around their working practices and customer experiences. This crisis has also widened the digital investment gap with smaller banks and credit unions being further out-spent and out-built by bigger banks. Those with under $10 billion in assets are significantly less likely to feel that their existing digital capabilities gave them any advantage over their competitors.
These points may not come as a surprise to many of us – we've all experienced sweeping change over the last few months. But our research has also brought to light the importance of marketing when it comes to digital transformation initiatives for banks and credit unions.
We asked the 500 marketers in our study to classify their depth of involvement in digital transformation initiatives. Each scenario was then analyzed against a set of digital transformation outcomes including:
The most successful digital transformation initiatives were found in banks and credit unions that were already applying a marketing mindset to shape their digital futures. The research also found that depth of marketing involvement was critical. It was not enough for marketers to be consulted or brought in as subject matter experts for part of the infrastructure. As a result of this research we were also able to define the five marketing mindsets that can drive powerful and customer-centered change, outlined in our full downloadable report.
You can read the full research write-up by downloading “Mindset Matters: Redefining Digital Banking Transformation with a Marketing Mindset” here.